This is a basic, non-technical but also detailed breakdown of what NFTs are and NFTs on the Solana blockchain. This is perfect for people just trying to understand the basics (you will learn a lot more along the way). This blog is intended for two types of people, the first is the group that have only really heard of NFTs but want to learn more and potentially get involved and the second are people who are interested in getting into Solana NFTs that are coming over from other chains such as Ethereum. If you already know what NFTs are and are just looking to see how you can get into the Solana space, then you can skip to the “How do I get started on Solana NFTs?” section.

What are NFTs?

An NFT is a Non-Fungible Token. Non-fungible means that it is completely unique and can’t be replaced. An example of a non-Fungible asset is a hand-crafted mug that your little cousin made you, this mug is completely unique and you would not be able to trade it for anything that exactly resembles it. On the other hand, a bank note is fungible, I can give you a $20 note and you can give me a different $20 note and they will be equally as valuable. In Crypto terms a coin such at Bitcoin is a fungible token as it represents the exact same thing as a different Bitcoin. A non-fungible token is obviously completely unique and can’t be represented by any other digital asset.

How do NFTs work?

All NFTs exist and operate on blockchains. These Non-Fungible tokens have specific data linked to them which makes them unique, and this data is all stored with the token on a blockchain. More on this later but first let’s break down what a blockchain is.

What are blockchains and how do they work?

Let’s break down what a blockchain is: In technical terms a blockchain is a distributed database that is shared among nodes (computers) on a network. Blockchains maintain a secure and decentralized record of transactions. Blockchains create a record of data which allows any activity to be openly investigated and thus creates trust without the need of a third party. In simple terms a blockchain can be seen as a whole bunch of computers that are all linked together and work together to verify transactions. Let’s say I wanted to send a $10 dollar note to a friend of mine, I could just go over and give them the note but then we would be the only two people who could verify that this has happened. In this example this is fine because we are friends, and the amount is not too great but if you wanted to send let’s say $1000 to someone you don’t know then this wouldn’t work. If you still wanted to go and physically drop the money off with them then it would be a good idea to have a few people from both parties be there to verify that the transaction did happen, and everything is valid so that no one can blame anyone later down the line. Banks already do this but in turn they receive a lot of power and have a lot of control over people who use their services. Blockchains solve these issues. Let’s go back to the original example of the $10 dollar note that I want to give to a friend, but now instead I send the $10 over a blockchain. When I send the money over the network a bunch of the nodes(computers) on the network see this transaction and are able to verify it. They can check that I am a valid user that has enough money for the transaction (in this case $10) and they also check to see that the person that I am sending it to is valid. Once they verify this transaction the money is sent over and the transaction is stored on the blockchain. Anyone can view the transaction and see that it has happened, but no external party has control over verifying/completing transactions. This is also crucial for safety as the computers that process transactions are random and are usually spread across the world, this means hackers are not able to gain access to a central power like they could in something like a bank. The $10 in this example is just used for simplicity’s sake. Anything can be sent on a blockchain, from tokens like Bitcoin and Ethereum to digital assets like jpeg files (images).

What makes NFTs special?

This is the million-dollar question! I’m sure you have heard people say “Why would I pay for that when I can just right-click and save it”. The answer is all about ownership. As I mentioned earlier NFTs have data that is linked to them, this data is called metadata. The metadata tied to an NFT can contain a whole host of information but two of the most important pieces of data are the “Creator” and the “Owner” fields. These fields allow for anybody to verify who the creator of an NFT is and who currently owns that NFT. This is HUGE… Imagine all the sneakers in the world were NFTs, anyone would immediately be able to tell whether a pair of shoes is real or fake from the creator information and if they decided to buy a pair of shoes, they would easily be able to prove that they bought them and that they are legit. The creator field will always remain the same, but the owner field changes as the NFT moves hands. These are just two of the nearly infinite data fields that could be linked to an NFT. In the example of the shoe the NFTs metadata could also store the shoes brand, model, size, and colourway! Right now the majority of NFTs are either images, gifs or videos but this is just the beginning. NFTs are already representing plots of digital land or keys to virtual apartments! The possibilities are endless.

How are NFTs created?

The digital assets that make up NFTs are usually created by designers and artists as normal digital art but then to turn them into NFTs they need to be put on a blockchain. The term for placing these assets onto a blockchain is “minting”. If you mint an NFT you are bringing this digital asset onto a blockchain network and basically starting its journey. Once an NFT is minted it can be sold, transferred or stored! You can go much deeper into this process, but this it is all that you need to know for now.

How do I get started investing in NFTs?

In this section I am going to break down the process of investing in NFTs in general, in the next section I will be breaking down how to get started on the Solana blockchain. If you are coming from another chain then you can skip this and head over to the section on Solana.

Things you will need to buy an NFT:

There are only two things you actually need to purchase and store an NFT. There are lots of other tools that are available but these are the two core things you will need:

1. A wallet to store your NFTs and Crypto Tokens.
2. Tokens for the blockchain you are planning to use (ETH, SOL etc).

A crypto wallet is just like a wallet that you would have in real life. This is a place where you can store your money and use it at your will. Crypto wallets differ from chain to chain but most operate as Web extensions that sit in the top of your web browser. I would recommend using Google Chrome or Brave Browser. Currently the most popular wallet for the ETH blockchain is MetaMask., these wallets allow you to send, receive and store Crypto and NFTs.

The second thing you will need are Crypto tokens to buy NFTs and pay for transaction costs. These tokens can be bought through exchanges like Coinbase or Binance and then transferred to your other wallets. The tokens that you buy will depend on what chain you want to operate on. Currently the biggest chain for NFTs is the Ethereum blockchain and for this you would need to buy ETH and then store that in your wallet and use it to purchase NFTs.

Once you have all of this set up you will need to find NFTs that you are interested in. As I mentioned earlier when NFTs first come onto the blockchain they need to be minted. This process can be done by the people creating the NFTs or can be done by people who are interested in buying the NFTs. The latter is more common. What would usually happen is that a project would create a bunch of NFTs and would then offer them to the public, the public would then come and mint these NFTs for a price determined by the team who created the NFT. You will usually be able to mint these NFTs on a website called a minting site that is setup by the team behind the NFTs. Once you are on the site you will need to connect your wallet to the page and then if you have enough to afford the NFT and if the token is on sale but not sold out you will be able to mint (purchase) the NFT. This NFT will then be placed in your wallet where you have full control over it. The second way of buying an NFT is through a secondary marketplace. Secondary marketplaces allow people to sell and buy NFTs. If you are a someone who has minted an NFT and would like to now sell, you would be able to go onto one of these secondary marketplaces and list your NFT at whatever price you would like. If there is someone else who wants that NFT for that price then they will be able to go to the marketplace, connect their wallet and buy that NFT. The prices of NFTs on these marketplaces are determined completely by supply and demand. The most popular marketplace for Ethereum is currently Opensea.

How do I get started with Solana NFTs?

The same principles that I stated above apply for Solana but now I will be going into specific apps that you can use. Once again you will need a wallet and in this case Solana tokens. The current best wallets that I recommend are Phantom and Solflare (in this example we will be using Phantom). Both these wallets can be installed from the browser extension store on your browser of choice. Once you have your wallet installed you will need some Solana tokens, I usually use Coinbase to buy these with my bank card. Once you have bought your tokens you will need to send them to your wallet. To do this you need to click on your Phantom wallet in your extension bar and copy the wallet address at the top of the little pop up. When in Coinbase go to the send/receive tab and choose to send Solana tokens. You will be asked to provide a wallet address that you want to send the Solana to and the amount to send. You can paste the wallet address that you copied earlier in the field and then choose the amount and send it to the wallet. Once the Solana tokens are in your Phantom wallet you can buy and sell it at your will. The next step is the process of acquiring an NFT. The two ways are to do this, you can either mint or to buy form a secondary marketplace. The process for minting NFTs or buying NFTs are similar. The only difference between minting and buying on a secondary marketplace is that during the mint all the prices are the same and you are able to possibly mint rare NFTs, buying on secondary you can only buy what people are offering. Currently the most popular secondary marketplace is Magic Eden. You can go to their website and look at all the different projects that are on Solana and all the different NFTs that are for sale from these projects. If you are on the Magic Eden’s website and have sufficient Solana in your Phantom wallet, then you are a few clicks away from buying an NFT. If you navigate to a project you like and then select an NFT from that project you will be able to click on it and buy the NFT at the price asked by the seller. If you do choose to buy the NFT then the Solana goes to the seller and the NFT goes into your wallet and this is all validated by computers that make up the Solana blockchain. Now you should know the steps to buying or minting an NFT, in the next section we will look at how to identify projects that you want to invest in.

How to find projects to invest in on Solana?

One of the hardest parts of investing in NFT projects is choosing the right ones to invest in. There are many different projects that all claim to do different things. You as a potential investor need to ensure that you understand and support the team and what they are building. It’s also particularly important to look out for scams but there are a few things that I will break down that can help minimize the risk of falling for scams. The process of finding projects with a lot of potential can be very difficult and can take a long time. There are hundreds of projects being released everyday and making sure to invest in the right ones is crucial. When I look into projects that I want to invest in I usually follow a few steps:

1. I start off by checking out a site called Howrare.is and then taking it from there. Howrare.is has a list containing majority of the upcoming mints and provides links to their Websites, Discord and Twitter. This is great for discovering new projects and staying up to date with upcoming projects and mints.
2. I would then recommend systematically going through all the mints you like and checking out their Twitter, Discord and Website. This is very important for detecting scams. When I look into a projects twitter account I go and look at the number of followers they have and compare it to the engagement that they get on their tweets. If a project has 10000 followers but is only getting 10–20 likes/comments then that is a big red fad, a low engagement can mean that the account has fake/bot followers. You can use a website called Follower Audit to look deeper into a twitter account and see how many followers are bots and how many are real, the site also allows you to easily view their engagement. Naturally projects will all have a few bot followers but they should definitely not have too many. It’s also important to see what type of tweets the page is sending out and for how long they have been tweeting. After checking out Twitter I usually go to the website and do a bit of digging to find information on the team and the projects next moves. Most projects put up roadmaps on their websites. Roadmaps are just a breakdown of all the plans a project has and when they want to execute on them. Looking into a project’s roadmap is especially important because this is where you will be able to tell what the team is working on and if the project is something you are willing to support. While on the website make sure to look into the team and have a look at their qualifications and whether or not they are doxed (Being doxed means having your identity publicly known, not just being a Twitter and Discord profile, which helps generate trust in a project). The final thing I look into is the Discord linked to a project. On the Discord you can get a good idea of how active the community is and you can quickly get an idea of the vibe around a project. A Discord server is also the best place to ask any questions that you have. You might even be able to talk to the founders and developers of projects and get good idea of how driven and knowledgeable they are. The Discord servers linked to most projects are usually well organized and contain a lot of information in their FAQ and roadmap channels which helps if you want to learn more about the project.
3. Once I have fully looked into a project and understand what they do and who they are I make the decision to mint or not to mint. I prefer to invest in projects that I see doing amazing things in the long term. It can be very tempting to mint a very hyped up and popular collection but if that collection doesn’t do anything or doesn’t differentiate themselves from other projects then they probably won’t be around in 6 month’s time. Majority of the projects you see being promoted on Instagram and twitter fall into this category, they pay huge amounts to market their project but the project itself does very little and dies out pretty fast.
4. It is very often the case that a mint sells out almost instantly and you are not able to mint an NFT. If this happens I usually wait for the project to get listed on a secondary marketplace and try buy an NFT from others who are wanting to sell to make a quick small profit.
5. It is also often the case that you find out about a really cool project after they have minted and the only option available is to buy from a secondary marketplace. In these instances, there are a few tips and tools that can help you get into the project. Most projects have a type of rarity system connected to their NFTs. Some will be rarer that others which will in turn be more valuable than others. Rarity is usually determined by specific attributes on the NFTs which are not as common as others. Websites like Moonrank and howrare.is are amazing tools to look into the rarity of NFTs within a project. When I am looking to get into a project that has already minted I usually open two windows, one containing Magic Eden or any other secondary marketplace and another with a rank chart where you will be able to search the rank of all the NFTs that you find that you might want to buy.

There it is! Thats everything I believe is necessary for anyone getting into NFTs to gain a solid understanding of how things work. There is still a lot that I want to write about but I really want to keep this post to the basics. Further down the line I would love to expand the blog to go into other more niche aspects of NFTs such as all their use cases in everyday life or on how NFTs and crypto can reshape how the world thinks about money and ownership. All of this will come in later posts!